IRS Delays Electronic Filing Requirement for Form 1042

The IRS has issued Notice 2024-26, providing an administrative exemption from the electronic filing requirement for Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, otherwise required to be electronically filed in calendar year 2024.

A withholding agent is required to file a withholding tax return on Form 1042 for income paid during the preceding calendar year when reporting of withholding on Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding is required. Final regulations were issued in February 2023 that require electronic filing if the withholding agent is required to file 10 or more returns of any type during the same calendar year. These requirements were to apply beginning with Forms 1042 due on or after March 15, 2024. Pursuant to Notice 2024-26, Forms 1042 can be submitted on paper in calendar year 2024. Withholding agents that are foreign persons are further exempt from electronically filing Forms 1042 in calendar year 2025.